Cabinet Approves Rs 1.64-Lakh-Crore Package For BSNL's Revival
The package involves a cash support of Rs 43,964 crore and Rs 1,20,192 crore in non-cash support: Telelcom Minister
The government has approved a Rs 1,64,156-crore package for the revival of BSNL.
The package involves a cash support of Rs 43,964 crore and Rs 1,20,192 crore in non-cash support, Telecom Minister Ashwini Vaishnaw said. “The package is for a period of four years. 60-70% of the implementation of the package will be done in the first two years. The results will be visible in the span of two years.”
The key part of the cash support, according to Vaishnaw, is spectrum cost, capex investment and viability gap funding.
The cabinet—headed by the prime minister—has also approved allocation of administrative spectrum for 4G and 5G services to BSNL, according to a PIB statement. It has approved a capital expenditure for the state-owned carrier to upgrade network infrastructure, including upgrading 1.2 lakh telecom sites.
The government has decided to convert Rs 33,000 crore of all dues in form of AGR dues etc., to equity of the company. It has approved sovereign guarantee bonds to be issued by BSNL to pay back the bank loans. This will reduce the interest cost for the company.
Bankers to BSNL include State Bank of India, Bank of Baroda, Canara Bank, Union Bank of India, Punjab National Bank, Jammu and Kashmir Bank, Indian Bank, Allahabad Bank, Central Bank of India, ICICI Bank Ltd., IndusInd Bank Ltd., Yes Bank, and Bank of India, according to BSNL 2021 annual report.
The government has also approved to fund the viability gap to provide telecom services in remote areas.
It has approved the amalgamation of BSNL and BBNL to merge the optical fibre network.
BSNL—which manages telecom across India, except Delhi and Mumbai—has Rs 19,000 crore of revenue and Rs 18,000 crore of expenses. It had reported operational profit for the first time after the 2019 revival package. The company has a subscriber market share of 10%.
“BSNL has actually turned around after the 2019 package. It has made an operating profit of around Rs 1,000 crore,” Vaishnaw said, adding that the company has given two years of operating profits and attrition of subscribers has stabilised.